public finance fiscal & monetary policy section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

A change in fiscal policy affects the balance of payments through

a) Neither current account nor capital account

b) Both the current account and capital account

c) Only the current account

d) Only the capital account

Question : 2

Which of the following is /are among the noticeable features of the recommendations of the Thirteenth Finance Commission?

1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design.
2. A design for the creation of lakhs of jobs in the next ten years in consonance with India’s demographic dividend.
3. Devolution of a specified share of central taxes to local bodies as grants.

a) 1 only

b) 1 and 3

c) 2 and 3

d) 1, 2 and 3

Question : 3

Government securities are considered liquid because they are

a) stable in value

b) convertible into other types of saving deposits

c) backed by the Government treasury

d) quickly and easily marketable

Question : 4

Which among the following is/are the nodal agency for implementing the monetary policy?

1. State Bank of India
2. Reserve Bank of India
3. Union Bank

a) 1 only

b) 2 only

c) 1 and 2

d) 1, 2 and 3

Question : 5

Fiscal Policy is concerned with

a) the policy for dealing with IMF

b) policy for regulating stock

c) the volume of currency that banks should put in the economy

d) the policy regarding taxation and expenditure

Question : 6

Corporation tax is imposed by

a) State Government

b) State as well as Central Government

c) Central Government

d) Local Government